AbitibiBowater, Montreal, Que., Canada, reported this week that it has settled with the Government of Canada regarding its assets and rights in Newfoundland and Labrador, Canada, expropriated by the provincial government under Bill 75 in December 2008. The Government of Canada will pay AbitibiBowater C$130 million, representing not more than the fair market value of those rights and assets, following the company's emergence from creditor protection.
As part of the settlement agreement, AbitibiBowater will waive its legal actions and claims against the Government of Canada under the North American Free Trade Agreement (NAFTA). The settlement agreement is conditional upon AbitibiBowater obtaining approval of its terms by the Superior Court of Quebec in the CCAA proceedings and by the U.S. court in the chapter 11 bankruptcy proceedings as well as court approvals in the U.S. and Canada of AbitibiBowater's restructuring plans. Following emergence, the settlement payment will be paid to the new Canadian entity.
"We believe this is an acceptable settlement for our company, stakeholders, and creditors, given the set of circumstances faced by the company at this particular time as well as the inherent uncertainty of any judicial process," David J. Paterson, president and CEO, said. "We are now able to move forward and focus on finalizing our restructuring process and plans to emerge from creditor protection in the fall 2010."
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